The Essential Finance Rituals for Scaling Your Agency

Starting your own agency is a daunting task. When you do it, you're responsible for everything. From developing business strategies to delivering the highest quality of services to your clients. But one of the most critical aspects of running a successful agency is having a solid finance department. Without an effective finance system or team, you risk running into financial hurdles that may stunt your agency's growth. In this edition, we'll go over the rituals you should perform daily, weekly, bi-monthly, monthly, quarterly, and yearly to help you build and maintain a world-class finance department and scale your agency.

Daily Rituals

Your everyday routines should consist of recording daily transactions from your bank and credit card accounts into your accounting software. This helps you close your books quicker and minimizes discrepancies in your accounts. By staying on top of your finances daily, you'll also catch any potential problems early, giving you ample time to take corrective action.

Weekly Rituals

Every week, you should send out invoices, pay your bills, and make phone calls to collect cash. This ritual helps you stay on top of your finances and prevents a backlog of work that may put you behind schedule and cost your agency money. Generally, we recommend that your invoicing, accounts payables, and accounts receivable activities are dedicated to different days. For example, you might want to send invoices out on Tuesday, pay your bills on Wednesday and reach out to your clients that owe you money on Thursday.

Bi-Monthly Rituals

Paying your employees and contractors should be a bi-monthly ritual. Typically, I suggest doing this on the 15th and the last day of the month. This ritual helps keep your employees and contractors happy and motivated, knowing they'll receive payment promptly. Also, reviewing and reconciling bank statements is another bi-monthly routine and a chance to identify any billing errors or fraud.

Monthly Rituals

Maintaining a monthly routine is crucial for financial control and gaining a comprehensive understanding of your business's fiscal well-being. It is advisable to promptly close the books each month, striving to minimize the time between month-end and completion. Additionally, crafting a monthly analysis document that delves into key performance indicators such as cash flow, profitability, and revenue is essential. By diligently monitoring these metrics, you can identify prevailing trends, evaluate areas that may require adjustments, and proactively address potential cash flow challenges before they escalate into significant financial concerns.

Quarterly Rituals

The quarterly ritual follows the same path as the monthly one but is more comprehensive. You'll update your quarterly forecast for the year, update your cash flow analysis, pay your tax estimates, and complete a quarterly analysis document. Reviewing your quarterly analysis document will give you a good understanding of your agency’s progress towards achieving your annual financial goals.

Yearly Rituals

There are several important activities that need to be completed on an annual basis. First and foremost, you should create your annual budget for the upcoming year. Additionally, it is crucial to compile a year-end analysis document that provides an overview of your agency's performance. Lastly, make sure to prepare for your annual tax return. These tasks are essential for maintaining financial stability and evaluating your agency's progress.

Running and scaling an agency requires more than just offering top-of-the-line services. You need to develop and implement a world-class finance department to keep track of your agency's financial health. By creating daily, weekly, bi-monthly, monthly, quarterly, and annual finance rituals, you will maintain control of your agency's money and keep a finger on the pulse of your business. Remember, consistency, and attention to detail are the keys to success. Perform these financial rituals, and you're sure to have a solid financial foundation for scaling your agency.